81 FR 58989 - Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay the Due Date for Certain Submissions Under Rule G-45 and Provide Guidance on the Application of Rules G-42 and G-44 to Municipal Advisors to Sponsors or Trustees of Municipal Fund Securities
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 81, Issue 166 (August 26, 2016)
Federal Register Volume 81, Issue 166 (August 26, 2016)
| Page Range | 58989-58992 | |
| FR Document | 2016-20452 |
[Federal Register Volume 81, Number 166 (Friday, August 26, 2016)] [Notices] [Pages 58989-58992] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2016-20452] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-78622; File No. SR-MSRB-2016-11] Self-Regulatory Organizations; Municipal Securities Rulemaking Board; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay the Due Date for Certain Submissions Under Rule G-45 and Provide Guidance on the Application of Rules G-42 and G-44 to Municipal Advisors to Sponsors or Trustees of Municipal Fund Securities August 22, 2016. Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act'' or ``Exchange Act'') \1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on August 12, 2016 the Municipal Securities Rulemaking Board (the ``MSRB'' or ``Board'') filed with the Securities and Exchange Commission (the ``Commission'' or ``SEC'') the proposed rule change as described in Items I and II below, which Items have been prepared by the MSRB. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change The MSRB filed with the Commission a proposed rule change to delay by two years, until August 29, 2018, the date on which submissions must be made pursuant to Rule G-45, on reporting of information on municipal fund securities, by underwriters of programs established to implement the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (the ``ABLE Act'' [[Page 58990]] and an ``ABLE program'').\3\ The submissions on Form G-45 from such underwriters currently are due August 29, 2016. However, the current due dates under Rule G-45 for submissions from underwriters of other types of municipal fund securities, namely tax-advantaged college savings plans established under section 529 of the Internal Revenue Code of 1986, as amended (the ``Code'') (a ``529 college savings plan''),\4\ would remain unchanged. --------------------------------------------------------------------------- \3\ The ABLE Act was enacted on December 19, 2014 as part of The Tax Increase Prevention Act of 2014 (Pub. L. 113-295). \4\ 26 U.S.C. 529(b)(1)(A)(ii). --------------------------------------------------------------------------- In addition, the proposed rule change would provide guidance under (i) Rule G-42, on duties of non-solicitor municipal advisors, that such rule applies to municipal advisors that engage in municipal advisory activities for sponsors or trustees of ABLE programs and (ii) Rule G- 44, on supervisory and compliance obligations of municipal advisors, that such rule equally applies to municipal advisors that engage in municipal advisory activities for sponsors or trustees of 529 college savings plans, ABLE programs, and other municipal fund securities (the amendment to Rule G-45 and guidance under Rules G-42 and G-44, collectively the ``proposed rule change''). The MSRB proposes an immediate effectiveness for the proposed rule change. The text of the proposed rule change is available on the MSRB's Web site at www.msrb.org/Rules-and-Interpretations/SEC-Filings/2016-Filings.aspx, at the MSRB's principal office, and at the Commission's Public Reference Room. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the MSRB included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The MSRB has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The MSRB proposes to delay by two years, until August 29, 2018, the date the submissions are due under Rule G-45 on Form G-45 from underwriters to ABLE programs. In addition, the MSRB proposes to provide guidance under (i) Rule G-42, that such rule applies to municipal advisors that engage in municipal advisory activities for sponsors or trustees of ABLE programs and (ii) Rule G-44, that such rule equally applies to municipal advisors that engage in municipal advisory activities for sponsors or trustees of 529 college savings plans, ABLE programs, and other municipal fund securities. The ABLE Act added section 529A to the Code to permit a state, or an agency or instrumentality thereof, to establish and maintain a new type of tax-advantaged savings program to help support individuals with disabilities in maintaining health, independence, and quality of life. Section 529A was modeled on section 529 of the Code.\5\ Section 529 of the Code, in part, established 529 college savings plans to encourage saving for future higher education costs.\6\ The SEC has determined that interests offered by such 529 college savings plans are municipal securities under section 3(a)(29) of the Act.\7\ --------------------------------------------------------------------------- \5\ Report to accompany H.R. 647, Committee on Ways and Means, H.R. Rept. No. 113-614, part 1 at 7 (2014). \6\ Section 529 also established prepaid tuition plans. 26 U.S.C. 529(b)(1)(A)(i). Under a prepaid tuition plan, an investor may purchase tuition credits or certificates on behalf of a designated beneficiary, which entitle the beneficiary to the waiver or payment of qualified higher education expenses. Prepaid tuition plans generally have residency requirements. Such credits or certificates generally are not viewed as being municipal securities, and dealers generally do not participate in the marketing of prepaid tuition plans. \7\ Exchange Act Release No. 70462 (Sept. 20, 2013), 78 FR 67468, 67472-73 (Nov. 12, 2013). See Letter from Catherine McGuire, Chief Counsel, Division of Market Regulation, SEC, to Diane G. Klinke, General Counsel, MSRB (Feb. 26, 1999) (determining that at least some interests in higher education trusts are municipal securities under the Act). --------------------------------------------------------------------------- Given the similarities between the structure of ABLE accounts and 529 college savings plan accounts and the manner in which interests in those accounts will be distributed, the MSRB requested interpretive guidance from the SEC staff. Specifically, the MSRB requested guidance on: (i) Whether interests in an ABLE account offered through an ABLE program are ``municipal securities,'' as defined in Section 3(a)(29) of the Exchange Act, and (ii) whether a dealer participating in the sale of those interests would be participating in a ``primary offering'' and thus be subject to the requirements of Rule 15c2-12 under the Exchange Act. In response to the first request, the SEC staff stated that: \8\ --------------------------------------------------------------------------- \8\ Letter dated March 31, 2016 from Jessica S. Kane, Director, Office of Municipal Securities, SEC, to Robert A. Fippinger, Esq., Chief Legal Officer, MSRB, in response to letter dated December 31, 2015 from Robert A. Fippinger to Jessica S. Kane available at https://www.sec.gov/info/municipal/msrb-letter-033116-interests-in-able-accounts.pdf [footnote omitted]. at least some interests in ABLE accounts . . . may be ``municipal securities'' as defined in Section 3(a)(29) of the Exchange Act, depending on the facts and circumstances, including without limitation, the extent to which an ABLE account through an ABLE Program is a direct obligation of, or obligation guaranteed as to principal or interest by, a State or any agency or instrumentality --------------------------------------------------------------------------- thereof. With respect to the second request, the SEC staff stated: \9\ --------------------------------------------------------------------------- \9\ Id. [W]e note that Rule 15c2-12(f)(7) under the Exchange Act defines a ``primary offering'' as including an offering of municipal securities directly or indirectly by or on behalf of an issuer of such securities. Based upon your letter and communications with MSRB staff, it is our understanding that interests in ABLE Programs generally are offered only by direct purchase from the issuer. Accordingly, we would view those interests as having been sold in a ``primary offering'' as that term is defined in Rule 15c2-12. If a dealer is acting as an ``underwriter'' (as defined in Rule 15c2- 12(f)(8)) in connection with that primary offering, the dealer may --------------------------------------------------------------------------- be subject to the requirements of Rule 15c2-12. In April 2016, after the Board had received the SEC staff guidance, the Board provided interpretative guidance under MSRB Rule D-12, on the definition of ``municipal fund security.'' \10\ --------------------------------------------------------------------------- \10\ MSRB Regulatory Notice 2016-14 (Apr. 12, 2016) (the ``April guidance''). --------------------------------------------------------------------------- The April guidance provided that interests in ABLE accounts may be municipal fund securities, and that to the extent that dealers effect transactions in municipal fund securities, such dealers may be subject to all Board rules, unless those dealers are specifically exempted from any of those rules. The April guidance also anticipated that the Board would publish guidance to address particular issues, including Rule G- 45, applicable to the sale of interests in ABLE programs by dealers.\11\ The proposed rule change is the first of such guidance [[Page 58991]] to address particular issues related to the sale of interests in ABLE programs by dealers and related to municipal advisory activities provided by municipal advisors to sponsors or trustees of ABLE programs. --------------------------------------------------------------------------- \11\ Id. --------------------------------------------------------------------------- Specifically, as ABLE programs become operational, the proposed rule change would delay, by two years from August 29, 2016 until August 29, 2018, the date that submissions are due under Rule G-45 from underwriters to ABLE programs. The MSRB believes that the delay would help ensure that the MSRB receives reliable, complete and accurate filings on Form G-45 from such underwriters. The MSRB also believes that the delay would help ensure that the MSRB receives more meaningful data about a larger set of ABLE programs on Form G-45. However, the current deadlines under Rule G-45 for submissions from underwriters of 529 college savings plans would remain unchanged. Further, the proposed rule change would provide guidance in supplementary material under (i) Rule G-42, that such rule applies to municipal advisors that engage in municipal advisory activities for sponsors or trustees of ABLE programs and (ii) Rule G-44, that such rule equally applies to municipal advisors that engage in municipal advisory activities for sponsors or trustees of 529 college savings plans, ABLE programs, and other municipal fund securities. The proposed guidance would provide clarity about the applicability of such rules to municipal advisors that engage in municipal advisory activities for sponsors or trustees of municipal fund securities. The MSRB is proposing this guidance in response to requests from industry groups in other Board rulemaking proposals. 2. Statutory Basis The MSRB believes that the proposed rule change is consistent with section 15B(b)(2)(C) of the Act,\12\ which provides that the MSRB's rules shall: --------------------------------------------------------------------------- \12\ 15 U.S.C. 78o-4(b)(2)(C). Be designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in regulating, clearing, settling, processing information with respect to, and facilitating transactions in municipal securities and municipal financial products, to remove impediments to and perfect the mechanism of a free and open market in municipal securities and municipal financial products, and, in general, to protect investors, --------------------------------------------------------------------------- municipal entities, obligated persons, and the public interest. As ABLE programs become operational, the proposed rule change would provide underwriters to ABLE programs with additional time to submit reliable, accurate and complete data to the MSRB under Rule G-45. The proposed rule change also would provide the MSRB with more meaningful data about a larger set of ABLE programs under Rule G-45. Further, the proposed rule change would provide guidance about the applicability of (i) Rule G-42 to municipal advisors that engage in municipal advisory activities for sponsors or trustees of ABLE programs and (ii) Rule G-44 to municipal advisors that engage in municipal advisory activities for sponsors or trustees of 529 college savings plans, ABLE programs, and other municipal fund securities. The proposed guidance would provide clarity about the applicability of such rules to municipal advisors that engage in municipal advisory activities for sponsors or trustees of municipal fund securities. B. Self-Regulatory Organization's Statement on Burden on Competition Section 15B(b)(2)(C) of the Act \13\ requires that MSRB rules be designed not to impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The MSRB does not believe that the proposed rule change would impose any burden on competition not necessary or appropriate in furtherance of the Act. The proposed rule change would extend the date that submissions on Form G- 45 are due from underwriters to ABLE programs by two years from August 29, 2016 until August 29, 2018. The proposed rule change also would provide guidance about the applicability of (i) Rule G-42 to municipal advisors that engage in municipal advisory activities for sponsors or trustees of ABLE programs and (ii) Rule G-44 to municipal advisors that engage in municipal advisory activities for sponsors or trustees of 529 college savings plans, ABLE programs, and other municipal fund securities. --------------------------------------------------------------------------- \13\ Id. --------------------------------------------------------------------------- C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others Written comments were neither solicited nor received on the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Pursuant to section 19(b)(3)(A) \14\ of the Act and Rule 19b- 4(f)(6) \15\ thereunder, the MSRB has designated the proposed rule change as one that affects a change that does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate. A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative until 30 days after the date of filing.\16\ However, Rule 19b-4(f)(6)(iii) permits the Commission to designate a shorter time if consistent with the protection of investors and the public interest.\17\ --------------------------------------------------------------------------- \14\ 15 U.S.C. 78s(b)(3)(A). \15\ 17 CFR 240.19b-4(f)(6). \16\ Id. \17\ In addition, Rule 19b-4(f)(6)(iii) requires a self- regulatory organization to give the Commission written notice of its intent to file a proposed rule change, along with a brief description and text of such proposed rule change, at least five business days prior to the date of filing, or such shorter time as designated by the Commission. The MSRB fulfilled this obligation. --------------------------------------------------------------------------- The MSRB has requested that the Commission waive the 30-day operative delay specified in Rule 19b-4(f)(6)(iii).\18\ The deadline for underwriters to ABLE programs to submit data under Rule G-45 for the period ending June 30, 2016 is August 29, 2016. According to the MSRB, the waiver of the 30-day operative delay will provide certainty with respect to the due date for underwriters to make submissions on Form G-45 in connection with ABLE programs. In order to delay such submissions, the MSRB states that it is important that the proposed rule change become effective immediately. The Commission believes that waiving the 30-day operative delay is consistent with the protection of investors and the public interest as it will provide certainty as to the due date for submissions on Form G-45 and avoid confusion in the market. Accordingly, the Commission hereby waives the 30-day operative delay specified in Rule 19b-4(f)(6)(iii) and designates the proposed rule change to be operative upon filing.\19\ --------------------------------------------------------------------------- \18\ See SR-MSRB-2016-11 (filed with the Commission on August 12, 2016). \19\ For the purpose of waiving the 30-day operative delay for this proposal, the Commission has considered the proposed rule's impact on efficiency, competition, and capital formation. See 15 U.S.C. 78c(f). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the [[Page 58992]] Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-MSRB-2016-11 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549. All submissions should refer to File Number SR-MSRB-2016-11. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of the filing also will be available for inspection and copying at the principal office of the MSRB. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-MSRB-2016-11 and should be submitted on or before September 16, 2016. --------------------------------------------------------------------------- \20\ 17 CFR 200.30-3(a)(12). For the Commission, pursuant to delegated authority.\20\ Robert W. Errett, Deputy Secretary. [FR Doc. 2016-20452 Filed 8-25-16; 8:45 am] BILLING CODE 8011-01-P
![Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices 58989
Exchange believes that the proposal will At any time within 60 days of the the Commission does not edit personal
promote competition by enabling the filing of the proposed rule change, the identifying information from
Exchange to offer a market data product Commission summarily may submissions. You should submit only
similar to that currently offered by the temporarily suspend such rule change if information that you wish to make
NYSE and Nasdaq.17 Thus, the it appears to the Commission that such available publicly. All submissions
Exchange believes this proposed rule action is necessary or appropriate in the should refer to File No. SR–BatsEDGX–
change is necessary to permit fair public interest, for the protection of 2016–45, and should be submitted on or
competition among national securities investors, or otherwise in furtherance of before September 16, 2016.
exchanges. the purposes of the Act. If the For the Commission, by the Division of
Commission takes such action, the Trading and Markets, pursuant to delegated
C. Self-Regulatory Organization’s
Commission shall institute proceedings authority.20
Statement on Comments on the
to determine whether the proposed rule Robert W. Errett,
Proposed Rule Change Received From
change should be approved or Deputy Secretary.
Members, Participants, or Others disapproved.
The Exchange has neither solicited [FR Doc. 2016–20461 Filed 8–25–16; 8:45 am]
nor received written comments on the IV. Solicitation of Comments BILLING CODE 8011–01–P
proposed rule change. Interested persons are invited to
submit written data, views, and
III. Date of Effectiveness of the arguments concerning the foregoing, SECURITIES AND EXCHANGE
Proposed Rule Change and Timing for including whether the proposed rule COMMISSION
Commission Action change is consistent with the Act.
Because the proposed rule change Comments may be submitted by any of [Release No. 34–78622; File No. SR–MSRB–
does not (i) significantly affect the the following methods: 2016–11]
protection of investors or the public
Electronic Comments Self-Regulatory Organizations;
interest; (ii) impose any significant
burden on competition; and (iii) become • Use the Commission’s Internet Municipal Securities Rulemaking
operative for 30 days from the date on comment form (http://www.sec.gov/ Board; Notice of Filing and Immediate
which it was filed, or such shorter time rules/sro.shtml); or Effectiveness of a Proposed Rule
as the Commission may designate, it has • Send an email to rule- Change To Delay the Due Date for
become effective pursuant to section comments@sec.gov. Please include File Certain Submissions Under Rule G–45
19(b)(3)(A) of the Act 18 and Rule 19b– No. SR–BatsEDGX–2016–45 on the and Provide Guidance on the
4(f)(6) thereunder.19 subject line. Application of Rules G–42 and G–44 to
Municipal Advisors to Sponsors or
Paper Comments
enables recipients to receive aggregated two-sided Trustees of Municipal Fund Securities
quotations from the Bats Exchanges for up to five • Send paper comments in triplicate
(5) price levels (‘‘Bats One Premium Feed’’). See to Secretary, Securities and Exchange August 22, 2016.
Exchange Rule 13.8(b). See also Securities Commission, 100 F Street NE., Pursuant to section 19(b)(1) of the
Exchange Act Release No. 73918 (December 23,
2014), 79 FR 78920 (December 31, 2014) (File Nos.
Washington, DC 20549–1090. Securities Exchange Act of 1934 (the
SR–EDGX–2014–25; SR–EDGA–2014–25; SR– All submissions should refer to File No. ‘‘Act’’ or ‘‘Exchange Act’’) 1 and Rule
BATS–2014–055; SR–BYX–2014–030) (Notice of SR–BatsEDGX–2016–45. This file 19b–4 thereunder,2 notice is hereby
Amendments No. 2 and Order Granting Accelerated number should be included on the given that on August 12, 2016 the
Approval to Proposed Rule Changes, as Modified by
Amendments Nos. 1 and 2, to Establish a New subject line if email is used. To help the Municipal Securities Rulemaking Board
Market Data Product called the Bats One Feed) Commission process and review your (the ‘‘MSRB’’ or ‘‘Board’’) filed with the
(‘‘Bats One Approval Order’’). The Exchange uses comments more efficiently, please use Securities and Exchange Commission
the following data feeds to create the Bats One only one method. The Commission will (the ‘‘Commission’’ or ‘‘SEC’’) the
Feed, each of which are available to vendors: EDGX
Depth, EDGA Depth, BYX PITCH Feed, and the post all comments on the Commission’s proposed rule change as described in
BZX PITCH Feed. The Exchange notes that a vendor Internet Web site (http://www.sec.gov/ Items I and II below, which Items have
could utilize the proposed EDGX Summary Depth rules/sro.shtml). Copies of the been prepared by the MSRB. The
Feed, as well as the summarized depth feeds to be submission, all subsequent Commission is publishing this notice to
proposed by BYX, BZX, and EDGA to create a
competing product to the Bats One Feed. Supra amendments, all written statements solicit comments on the proposed rule
note 8. The Exchange represents that a competing with respect to the proposed rule change from interested persons.
vendor could obtain these data feeds from each Bats change that are filed with the
Exchange on the same latency basis as the system I. Self-Regulatory Organization’s
Commission, and all written
that performs the aggregation and consolidation of Statement of the Terms of Substance of
the Bats One Feed. See Bats One Approval Order. communications relating to the
the Proposed Rule Change
While the proposed EDGX Summary Depth Feed proposed rule change between the
does not contain the symbol summary or Commission and any person, other than The MSRB filed with the Commission
consolidated volume data included in the Bats One those that may be withheld from the
Feed, a vendor could include this information in a
a proposed rule change to delay by two
competing product as this information is easily public in accordance with the years, until August 29, 2018, the date on
derivable from the proposed feeds or can be provisions of 5 U.S.C. 552, will be which submissions must be made
obtained from the securities information processors available for Web site viewing and pursuant to Rule G–45, on reporting of
on the same terms as the Exchange. printing in the Commission’s Public
17 See supra note 14.
information on municipal fund
Reference Room, 100 F Street NE.,
mstockstill on DSK3G9T082PROD with NOTICES
18 15 U.S.C. 78s(b)(3)(A). securities, by underwriters of programs
19 17 CFR 240.19b–4(f)(6). As required under Rule Washington, DC 20549, on official established to implement the Stephen
19b–4(f)(6)(iii), the Exchange provided the business days between the hours of Beck, Jr., Achieving a Better Life
Commission with written notice of its intent to file 10:00 a.m. and 3:00 p.m. Copies of the Experience Act of 2014 (the ‘‘ABLE Act’’
the proposed rule change, along with a brief filing also will be available for
description and the text of the proposed rule
change, at least five business days prior to the date
inspection and copying at the principal 20 17 CFR 200.30–3(a)(12).
of filing of the proposed rule change, or such office of the Exchange. All comments 1 15 U.S.C. 78s(b)(1).
shorter time as designated by the Commission. received will be posted without change; 2 17 CFR 240.19b–4.
VerDate Sep<11>2014 21:17 Aug 25, 2016 Jkt 238001 PO 00000 Frm 00088 Fmt 4703 Sfmt 4703 E:\FR\FM\26AUN1.SGM 26AUN1](https://thefederalregister.org/doc/81_FR_59155/page/1.svg)
![58990 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices
and an ‘‘ABLE program’’).3 The A. Self-Regulatory Organization’s defined in Section 3(a)(29) of the
submissions on Form G–45 from such Statement of the Purpose of, and Exchange Act, and
underwriters currently are due August Statutory Basis for, the Proposed Rule (ii) whether a dealer participating in
29, 2016. However, the current due Change the sale of those interests would be
dates under Rule G–45 for submissions participating in a ‘‘primary offering’’
1. Purpose
from underwriters of other types of and thus be subject to the requirements
The MSRB proposes to delay by two of Rule 15c2–12 under the Exchange
municipal fund securities, namely tax-
years, until August 29, 2018, the date Act.
advantaged college savings plans
the submissions are due under Rule G– In response to the first request, the
established under section 529 of the 45 on Form G–45 from underwriters to SEC staff stated that: 8
Internal Revenue Code of 1986, as ABLE programs. In addition, the MSRB
amended (the ‘‘Code’’) (a ‘‘529 college at least some interests in ABLE accounts . . .
proposes to provide guidance under (i) may be ‘‘municipal securities’’ as defined in
savings plan’’),4 would remain Rule G–42, that such rule applies to Section 3(a)(29) of the Exchange Act,
unchanged. municipal advisors that engage in depending on the facts and circumstances,
In addition, the proposed rule change municipal advisory activities for including without limitation, the extent to
would provide guidance under (i) Rule sponsors or trustees of ABLE programs which an ABLE account through an ABLE
and (ii) Rule G–44, that such rule Program is a direct obligation of, or
G–42, on duties of non-solicitor obligation guaranteed as to principal or
municipal advisors, that such rule equally applies to municipal advisors
interest by, a State or any agency or
applies to municipal advisors that that engage in municipal advisory instrumentality thereof.
engage in municipal advisory activities activities for sponsors or trustees of 529
college savings plans, ABLE programs, With respect to the second request, the
for sponsors or trustees of ABLE SEC staff stated: 9
programs and (ii) Rule G–44, on and other municipal fund securities.
The ABLE Act added section 529A to [W]e note that Rule 15c2–12(f)(7) under the
supervisory and compliance obligations the Code to permit a state, or an agency Exchange Act defines a ‘‘primary offering’’ as
of municipal advisors, that such rule or instrumentality thereof, to establish including an offering of municipal securities
equally applies to municipal advisors and maintain a new type of tax- directly or indirectly by or on behalf of an
that engage in municipal advisory advantaged savings program to help issuer of such securities. Based upon your
activities for sponsors or trustees of 529 letter and communications with MSRB staff,
support individuals with disabilities in it is our understanding that interests in ABLE
college savings plans, ABLE programs, maintaining health, independence, and Programs generally are offered only by direct
and other municipal fund securities (the quality of life. Section 529A was purchase from the issuer. Accordingly, we
amendment to Rule G–45 and guidance modeled on section 529 of the Code.5 would view those interests as having been
under Rules G–42 and G–44, Section 529 of the Code, in part, sold in a ‘‘primary offering’’ as that term is
collectively the ‘‘proposed rule established 529 college savings plans to defined in Rule 15c2–12. If a dealer is acting
change’’). The MSRB proposes an encourage saving for future higher as an ‘‘underwriter’’ (as defined in Rule
education costs.6 The SEC has 15c2–12(f)(8)) in connection with that
immediate effectiveness for the
determined that interests offered by primary offering, the dealer may be subject to
proposed rule change. the requirements of Rule 15c2–12.
such 529 college savings plans are
The text of the proposed rule change In April 2016, after the Board had
municipal securities under section
is available on the MSRB’s Web site at 3(a)(29) of the Act.7 received the SEC staff guidance, the
www.msrb.org/Rules-and- Given the similarities between the Board provided interpretative guidance
Interpretations/SEC-Filings/2016- structure of ABLE accounts and 529 under MSRB Rule D–12, on the
Filings.aspx, at the MSRB’s principal college savings plan accounts and the definition of ‘‘municipal fund
office, and at the Commission’s Public manner in which interests in those security.’’ 10
Reference Room. accounts will be distributed, the MSRB The April guidance provided that
requested interpretive guidance from interests in ABLE accounts may be
II. Self-Regulatory Organization’s municipal fund securities, and that to
the SEC staff. Specifically, the MSRB
Statement of the Purpose of, and the extent that dealers effect
requested guidance on:
Statutory Basis for, the Proposed Rule (i) Whether interests in an ABLE transactions in municipal fund
Change account offered through an ABLE securities, such dealers may be subject
In its filing with the Commission, the program are ‘‘municipal securities,’’ as to all Board rules, unless those dealers
are specifically exempted from any of
MSRB included statements concerning 5 Report to accompany H.R. 647, Committee on those rules. The April guidance also
the purpose of and basis for the Ways and Means, H.R. Rept. No. 113–614, part 1 anticipated that the Board would
proposed rule change and discussed any at 7 (2014).
publish guidance to address particular
comments it received on the proposed 6 Section 529 also established prepaid tuition
issues, including Rule G–45, applicable
rule change. The text of these statements plans. 26 U.S.C. 529(b)(1)(A)(i). Under a prepaid
tuition plan, an investor may purchase tuition to the sale of interests in ABLE
may be examined at the places specified credits or certificates on behalf of a designated programs by dealers.11 The proposed
in Item IV below. The MSRB has beneficiary, which entitle the beneficiary to the rule change is the first of such guidance
prepared summaries, set forth in waiver or payment of qualified higher education
expenses. Prepaid tuition plans generally have
sections A, B, and C below, of the most residency requirements. Such credits or certificates
8 Letter dated March 31, 2016 from Jessica S.
significant aspects of such statements. generally are not viewed as being municipal Kane, Director, Office of Municipal Securities, SEC,
securities, and dealers generally do not participate to Robert A. Fippinger, Esq., Chief Legal Officer,
mstockstill on DSK3G9T082PROD with NOTICES
in the marketing of prepaid tuition plans. MSRB, in response to letter dated December 31,
7 Exchange Act Release No. 70462 (Sept. 20, 2015 from Robert A. Fippinger to Jessica S. Kane
2013), 78 FR 67468, 67472–73 (Nov. 12, 2013). See available at https://www.sec.gov/info/municipal/
Letter from Catherine McGuire, Chief Counsel, msrb-letter-033116-interests-in-able-accounts.pdf
Division of Market Regulation, SEC, to Diane G. [footnote omitted].
3 The ABLE Act was enacted on December 19, 9 Id.
Klinke, General Counsel, MSRB (Feb. 26, 1999)
2014 as part of The Tax Increase Prevention Act of (determining that at least some interests in higher 10 MSRB Regulatory Notice 2016–14 (Apr. 12,
2014 (Pub. L. 113–295). education trusts are municipal securities under the 2016) (the ‘‘April guidance’’).
4 26 U.S.C. 529(b)(1)(A)(ii). Act). 11 Id.
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![58992 Federal Register / Vol. 81, No. 166 / Friday, August 26, 2016 / Notices
Commission summarily may 2016–11 and should be submitted on or and at the Commission’s Public
temporarily suspend such rule change if before September16, 2016. Reference Room.
it appears to the Commission that such For the Commission, pursuant to delegated II. Self-Regulatory Organization’s
action is necessary or appropriate in the authority.20 Statement of the Purpose of, and
public interest, for the protection of Robert W. Errett, Statutory Basis for, the Proposed Rule
investors, or otherwise in furtherance of Deputy Secretary. Change
the purposes of the Act.
[FR Doc. 2016–20452 Filed 8–25–16; 8:45 am]
In its filing with the Commission, the
IV. Solicitation of Comments BILLING CODE 8011–01–P self-regulatory organization included
Interested persons are invited to statements concerning the purpose of,
submit written data, views, and and basis for, the proposed rule change
SECURITIES AND EXCHANGE and discussed any comments it received
arguments concerning the foregoing, COMMISSION
including whether the proposed rule on the proposed rule change. The text
change is consistent with the Act. [Release No. 34–78629; File No. SR– of those statements may be examined at
Comments may be submitted by any of NYSEMKT–2016–63] the places specified in Item IV below.
the following methods: The Exchange has prepared summaries,
Self-Regulatory Organizations; NYSE set forth in sections A, B, and C below,
Electronic Comments MKT LLC; Notice of Filing of Proposed of the most significant parts of such
• Use the Commission’s Internet Change Amending the Co-Location statements.
comment form (http://www.sec.gov/ Services Offered by the Exchange To
Add Certain Access and Connectivity A. Self-Regulatory Organization’s
rules/sro.shtml); or Statement of the Purpose of, and
Fees
• Send an email to rule-comments@ Statutory Basis for, the Proposed Rule
sec.gov. Please include File Number SR– August 22, 2016. Change
MSRB–2016–11 on the subject line. Pursuant to Section 19(b)(1) 1 of the 1. Purpose
Securities Exchange Act of 1934 (the
Paper Comments The Exchange proposes to amend the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
• Send paper comments in triplicate notice is hereby given that, on August co-location 4 services offered by the
to Secretary, Securities and Exchange 16, 2016, NYSE MKT LLC (the Exchange as follows: (1) To provide
Commission, 100 F Street NE., ‘‘Exchange’’ or ‘‘NYSE MKT’’) filed with additional information regarding the
Washington, DC 20549. the Securities and Exchange access to trading and execution services
Commission (the ‘‘Commission’’) the and connectivity to data provided to
All submissions should refer to File Users 5 with local area networks
proposed rule change as described in
Number SR–MSRB–2016–11. This file available in the data center; and (2) to
Items I, II, and III below, which Items
number should be included on the establish fees relating to Users’ access to
have been prepared by the self-
subject line if email is used. To help the trading and execution services;
regulatory organization. The
Commission process and review your connectivity to data feeds and to testing
Commission is publishing this notice to
comments more efficiently, please use and certification feeds; access to
solicit comments on the proposed rule
only one method. The Commission will clearing; and other services.
change from interested persons.
post all comments on the Commission’s More specifically, the Exchange
Internet Web site (http://www.sec.gov/ I. Self-Regulatory Organization’s proposes to revise the Price List and Fee
rules/sro.shtml). Copies of the Statement of the Terms of the Substance Schedule to include:
submission, all subsequent of the Proposed Rule Change a. a more detailed description of the
amendments, all written statements The Exchange proposes to amend the access to the trading and execution
with respect to the proposed rule co-location services offered by the systems of the Exchange and its Affiliate
change that are filed with the Exchange as follows: (1) To provide SROs (the ‘‘Exchange Systems’’) and
Commission, and all written additional information regarding the connectivity to certain market data
communications relating to the access to trading and execution services
proposed rule change between the and connectivity to data provided to
4 The Exchange initially filed rule changes
Commission and any person, other than Users with local area networks available
relating to its co-location services with the
those that may be withheld from the Securities and Exchange Commission
in the data center; and (2) to establish (‘‘Commission’’) in 2010. See Securities Exchange
public in accordance with the fees relating to User’s access to trading Act Release No. 62961 (September 21, 2010), 75 FR
provisions of 5 U.S.C. 552, will be and execution services; connectivity to 59299 (September 27, 2010) (SR–NYSEAmex–2010–
available for Web site viewing and data feeds and to testing and
80) (the ‘‘Original Co-location Filing’’). The
printing in the Commission’s Public Exchange operates a data center in Mahwah, New
certification feeds; access to clearing; Jersey (the ‘‘data center’’) from which it provides
Reference Room, 100 F Street NE., and other services. In addition, this co-location services to Users.
Washington, DC 20549 on official proposed rule change reflects changes to 5 For purposes of the Exchange’s co-location
business days between the hours of the NYSE MKT Equities Price List services, a ‘‘User’’ means any market participant
10:00 a.m. and 3:00 p.m. Copies of the that requests to receive co-location services directly
(‘‘Price List’’) and the NYSE Amex from the Exchange. See Securities Exchange Act
filing also will be available for Options Fee Schedule (‘‘Fee Schedule’’) Release No. 76009 (September 29, 2015), 80 FR
inspection and copying at the principal related to these co-location services. The 60213 (October 5, 2015) (SR–NYSEMKT–2015–67).
office of the MSRB. All comments As specified in the Price List and Fee Schedule, a
mstockstill on DSK3G9T082PROD with NOTICES
proposed change is available on the User that incurs co-location fees for a particular co-
received will be posted without change; Exchange’s Web site at www.nyse.com, location service pursuant thereto would not be
the Commission does not edit personal at the principal office of the Exchange, subject to co-location fees for the same co-location
identifying information from service charged by the Exchange’s affiliates New
submissions. You should submit only 20 17
York Stock Exchange LLC (‘‘NYSE LLC’’) and NYSE
CFR 200.30–3(a)(12). Arca, Inc. (‘‘NYSE Arca’’ and, together with NYSE
information that you wish to make 1 15 U.S.C. 78s(b)(1). LLC, the ‘‘Affiliate SROs’’). See Securities Exchange
available publicly. All submissions 2 15 U.S.C. 78a.
Act Release No. 70176 (August 13, 2013), 78 FR
should refer to File Number SR–MSRB– 3 17 CFR 240.19b–4. 50471 (August 19, 2013) (SR–NYSEMKT–2013–67).
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Document Created: 2016-08-26 10:41:12
Document Modified: 2016-08-26 10:41:12
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 81 FR 58989 |
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